About Federal Retirement Benefits

The federal government offers a variety of annuity, pension, and other benefits for retired employees. The Office of Personnel Management administers the benefits program for government employees, including the federal retirement program. In addition, federal employees are eligible for Social Security retirement benefits.

Function

The Federal Employees Retirement System (FERS) covers all federal employees hired after Dec. 31, 1983. Employees hired earlier are covered by the older Civil Service Retirement System, but have the option to switch to FERS.

Types

FERS has three basic components: a basic annuity plan, a savings plan, and Social Security.

Benefits

FERS' basic benefit plan is an annuity based on the following benefit formula: 1 percent of an employee's highest three-year average salary multiplied by their years of service. For example, an employee with a three-year average high of $50,000 and 25 years of service would receive an annual annuity benefit of $12,500.

Effects

In addition to the basic benefit, FERS has a savings plan that is similar to 401(k) plans offered by many companies.

Time Frame

Federal employees are vested in FERS when they reach five years of service.; the normal retirement age is 62. Employees with 30 years of service can retire at ages 55 to 57, depending on when they were born.

Resources

• Federal Retirement Guide